GST evasion of Rs 20 crore by leading Malayalam stars, distributors detected

 

Thiruvananthapuram: Payment evasion of Goods and Services Tax of around Rs 20 crore by 8 leading actors and a few film distributors of Malayalam cinema has been detected, and are currently facing legal proceedings.

The intelligence wing of the State GST department, which had confronted these actors, along with the statements given by the producers and distributors of their movies over the last few years, have estimated the tax evasion by the actors as around Rs 8 crore. The single largest evasion was by a prominent young actor and his evasion was estimated to be around Rs 4 crore. The evasion by the distributors accounted for around Rs 12.5 crore. The highest evasion was found committed by a distributor based at Thiruvananthapuram, who accounted for evading tax to the tune of Rs 4 crore.

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The information on tax evasion by the actors was revealed during the investigation against the distributors. The actors were supposed to acknowledge the receipt of the remuneration from the producers and distributors, which in turn had to reflect in the annual tax statements of the latter. However, the reluctance of the actors to acknowledge the remuneration received had landed the producers and distributors in trouble. There were also indications that part of the remuneration to some actors were paid using unaccounted money. Around 30 leading producers and distributors, who were investigated by the department, spilled the beans, according to a report by the Hindu.

Though the tax evaders were directed to pay the tax, it failed to evoke a good response as only Rs 50 lakh was remitted as tax. Once the formal notices are issued to the defaulters, they will be liable to pay a fine up to 100% of the taxable amount and face prosecution, the report added. The revenue earned by those in the cinema industry including the actors and technicians come under the ambit of the GST regime. The income earned for the service offered by actors by way of acting in movies and advertisements, stage shows, appearance in various programmes, endorsement of products and becoming brand ambassadors are taxable. The sector comes under the 18% tax net.